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Technology Stocks : Micron Only Forum -- Ignore unavailable to you. Want to Upgrade?

To: Land_Lubber who wrote (41091)	11/27/1998 12:53:00 PM
From: Lee Lichterman III	Read Replies (1) \| Respond to of 53903

>>Seriously though, MU is likely to trim its per share losses this way. Also, don't forget that the TI and INTC new shares will dilute the per share losses too!<< Good Point, I forgot about that. Thanks for the reminder. Lee

To: Land_Lubber who wrote (41091)	11/27/1998 4:12:00 PM
From: Carl R.	Read Replies (3) \| Respond to of 53903

Land Lubber, your post does paint a picture that is internally consistent. Unfortunately the picture it paints is not consistent with the behavior of the stock, nor the way Micron operates, nor the guidance that MU is apparently giving analysts as reflected in the analyst's earnings projection changes. MU is clearly moving to smaller line widths. I question the accuracy of claims of poor yields as I have no reason to believe that they are credible. Maybe Fabeyes really knows something, and maybe he is just some short making up facts. On these threads you never know. Nevertheless I suspect that with the TI acquisition MU's yields are probably not coming up as fast as in the past due to divided attention. Let's get one thing straight, though. MU will run lines as fast as possible. If there are shutdowns, they are due to equipment and process upgrades. Improving yields depends on statistics, and the only way to get them is to run flat out. There is absolutely no question that MU will make as many chips as possible, however many that is. There is zero chance that MU is reducing output. Here is my picture: 1. MU is moving quickly to smaller line widths. 2. They obviously achieved sufficiently high yields at .21µ on test lines before they switched to it on all production. Therefore I am confident that yields are fine, and increasing, though perhaps not as rapidly as in the past, and that costs are now less that they were before the shrink. 3. Costs are rapidly falling under $8 and comparable to Samsung, and are probably are around $7. 4. MU is selling virtually all production at contract prices due to extremely strong demand from OEMs, demand that is more than just seasonally strong 5. Strong spot prices due to strong demand for PCs and Korean cutbacks 6. Ability to raise contract prices due to strong spot market To summarize, I believe that they have rising prices and falling costs, but we will know soon enough how good the yields are. If I am correct, MU will post a profit this quarter from MU operations together with a moderate loss from TI operations, and will beat the consensus estimates. The stock price will probably tell us before that, though, and right now it is telling us yields are fine. Incidentally in looking at First Call, I note that the most recent estimates (estimates in the last 1 1/2 months) are now showing MU making money in 1999 and making over $2 in 2000. Carl